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KKR, in partnership with BREIT, is set to acquire a $1.64 billion student housing portfolio consisting of 19 properties across 10 states from BREIT. The acquisition includes over 10,000 beds anchored to 14 leading universities, emphasizing long-term conviction in the student housing sector. The transaction showcases strong demand for high-quality assets in attractive markets, expanding KKR's portfolio in the real estate sector.
KKR, in collaborazione con BREIT, sta per acquisire un portafoglio di alloggi per studenti del valore di 1,64 miliardi di dollari, composto da 19 proprietà distribuite in 10 stati, precedentemente detenute da BREIT. L'acquisizione include oltre 10.000 posti letto collegati a 14 importanti università, evidenziando una forte convinzione a lungo termine nel settore degli alloggi per studenti. La transazione dimostra una forte domanda di asset di alta qualità in mercati attraenti, ampliando il portafoglio di KKR nel settore immobiliare.
KKR, en asociación con BREIT, está a punto de adquirir un portafolio de vivienda estudiantil valorado en 1,64 mil millones de dólares, que consta de 19 propiedades en 10 estados, previamente propiedad de BREIT. La adquisición incluye más de 10,000 camas vinculadas a 14 universidades líderes, subrayando una fuerte convicción a largo plazo en el sector de vivienda estudiantil. La transacción muestra una demanda sólida de activos de alta calidad en mercados atractivos, expandiendo el portafolio de KKR en el sector inmobiliario.
KKR이 BREIT와 파트너십을 맺고 BREIT로부터 10개 주에 걸쳐 있는 19개의 부동산으로 구성된 16억 4천만 달러 규모의 학생 주택 포트폴리오를 인수할 예정입니다. 이 거래에는 14개의 주요 대학에 연계된 10,000개 이상의 침대가 포함되어 있으며, 학생 주택 부문에 대한 장기적인 확신을 강조합니다. 이 거래는 매력적인 시장에서 고품질 자산에 대한 강한 수요를 보여주며, KKR의 부동산 포트폴리오를 확장합니다.
KKR, en partenariat avec BREIT, est sur le point d'acquérir un portefeuille de logements étudiants d'une valeur de 1,64 milliard de dollars, composé de 19 propriétés réparties dans 10 états, précédemment détenues par BREIT. L'acquisition comprend plus de 10 000 lits associés à 14 universités de premier plan, soulignant la conviction à long terme dans le secteur du logement étudiant. La transaction illustre une forte demande pour des actifs de haute qualité dans des marchés attractifs, élargissant ainsi le portefeuille immobilier de KKR.
KKR plant in Partnerschaft mit BREIT, ein Studentenwohnungsportfolio im Wert von 1,64 Milliarden Dollar zu erwerben, das 19 Immobilien in 10 Bundesstaaten umfasst und zuvor von BREIT gehalten wurde. Die Akquisition beinhaltet über 10.000 Betten, die an 14 führende Universitäten angebunden sind und unterstreicht das langfristige Vertrauen in den Sektor für studentisches Wohnen. Die Transaktion zeigt eine starke Nachfrage nach hochwertigen Assets in attraktiven Märkten und erweitert das Immobilienportfolio von KKR.
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Insights
The acquisition of a significant student housing portfolio by KKR from BREIT, valued at approximately $1.64 billion, indicates a bullish stance on the long-term prospects of the student housing sector. The investment is noteworthy due to its scale and the quality of the assets involved, concentrated around leading four-year public universities. The properties are noted for their best-in-class amenities and strategic locations, which can be key drivers for occupancy rates and rent premium. Considering the structure of the deal, specifically that it is being conducted via a fund tailored to real estate investments, this implies a targeted approach and commitment of KKR to a specific real estate niche, which may signal potential for both yield and value appreciation. It's indicative of a trend where large investment firms are increasingly targeting real estate with steady demand drivers, such as student housing.
The strategic position of the newly acquired portfolio establishes KKR as a major player in the student housing market. The focus on universities with high enrollment growth exemplifies a direct response to the persistent demand for student housing. This demand is further sustained by structural constraints limiting new supply, thereby reducing the risk of over-saturation in these markets. KKR's use of its integrated platform, University Partners, for managing the properties not only streamlines operations but could also offer competitive advantages in terms of tenant satisfaction and operational efficiency. Prospective investors should note the potential for synergy between KKR's management capabilities and the assets' prime locations.
From a financial perspective, this transaction accentuates KKR's confidence in the robustness of the student housing market amidst a complex market environment. KKR's investment from its Real Estate Partners Americas III fund suggests that they are allocating significant capital towards stable, non-cyclical real estate with promising cash-flow prospects. This aligns with the broader real estate investment thesis that stable demand sectors, such as student housing, provide a hedge against economic volatility. Moreover, Blackstone's continued growth in student housing through American Campus Communities and their ability to initiate new projects, should be interpreted as a strong industry indicator that there is ongoing and future potential within the sector.
NEW YORK--(BUSINESS WIRE)--
KKR and Blackstone Real Estate Income Trust, Inc. (“BREIT”) today announced a definitive agreement for funds managed by KKR to acquire a portfolio of 19 purpose-built student housing properties from BREIT for approximately $1.64 billion.
The over 10,000-bed portfolio is comprised of 19 purpose-built, premium student housing assets anchored to 14 leading four-year public universities across 10 states. The communities feature a wide range of best-in-class amenities and the majority are located with easy pedestrian access to campus. BREIT acquired this portfolio in 2018 in a joint venture with Greystar Real Estate Partners, LLC ("Greystar").
“Student housing is a sector that we have long-term conviction in. We are pleased to be working with Blackstone to complete this transaction which will add a diverse mix of high-quality properties to our portfolio,” said Justin Pattner, Partner at KKR and Head of Real Estate Equity in the Americas. “The operating capabilities we have built with University Partners over the past decade and our ability to transact at scale, position us to create value for our investors and to continue investing in great living experiences across these communities. We are deploying into what we view as a compelling market environment to purchase quality real estate.”
Jacob Werner, Co-Head of Americas Acquisitions for Blackstone Real Estate, said: “This transaction is an excellent outcome for BREIT’s investors and demonstrates the strong demand for the high-quality assets in attractive markets that BREIT owns. We continue to have long-term conviction in student housing and are actively growing through BREIT’s student housing platform, American Campus Communities, which is the largest owner of student housing in the U.S.”
Upon closing of the transaction, the portfolio will be managed by University Partners, a leading owner and operator of student housing across the U.S. KKR launched University Partners in 2016 with a team of industry veterans as part of its strategy of creating vertically-integrated platforms to build scaled exposures to attractive real estate sectors. Over the past decade, KKR has acquired institutional-quality properties in top university markets across the country and expanded University Partners’ business to include third-party property management. Inclusive of the pending acquisition, University Partners will own and manage over 25,000 beds, representing nearly $4 billion of property value owned by KKR and other investors.
“This is a high quality, scaled portfolio of purpose-built student housing assets serving the country’s leading four-year public universities,” said Travis Roberts, Chief Executive Officer of University Partners. “Approximately half of the portfolio is in markets where we have existing operating experience, and this transaction will enable us to expand our presence into a number of attractive new markets. We believe student housing in the top university markets will continue to benefit from strong enrollment growth and structural constraints on new supply.”
Blackstone, predominantly through its wholly owned portfolio company American Campus Communities (ACC), is the largest owner of student housing in the U.S., with more than 190 properties, representing approximately 140,000 beds. Since acquiring ACC in 2022, Blackstone has enabled ACC to build more student housing, including breaking ground on four new student housing communities since Fall 2023. ACC expects to welcome students to six additional new ACC communities across the country in 2024.
The transaction is expected to close by the third quarter of 2024, subject to customary closing conditions. KKR is making its investment in this portfolio primarily from its KKR Real Estate Partners Americas III fund.
Gibson, Dunn & Crutcher LLP served as legal advisor to KKR.
TSB Capital Advisors and J.P. Morgan Securities LLC served as BREIT’s financial advisors. Simpson Thacher & Bartlett LLP served as BREIT’s legal advisor.
About KKR
KKR is a leading global investment firm that offers alternative asset management as well as capital markets and insurance solutions. KKR aims to generate attractive investment returns by following a patient and disciplined investment approach, employing world-class people, and supporting growth in its portfolio companies and communities. KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. KKR’s insurance subsidiaries offer retirement, life and reinsurance products under the management of Global Atlantic Financial Group. References to KKR’s investments may include the activities of its sponsored funds and insurance subsidiaries. For additional information about KKR & Co. Inc. (NYSE: KKR), please visit KKR’s website at www.kkr.com. For additional information about Global Atlantic Financial Group, please visit Global Atlantic Financial Group’s website at www.globalatlantic.com.
About Blackstone Real Estate Income Trust, Inc.
Blackstone Real Estate Income Trust, Inc. (BREIT) is a perpetual-life, institutional quality real estate investment platform that brings private real estate to income focused investors. BREIT invests primarily in stabilized, income-generating U.S. commercial real estate across key property types and to a lesser extent in real estate debt investments. BREIT is externally managed by a subsidiary of Blackstone (NYSE: BX), a global leader in real estate investing. Blackstone’s real estate business was founded in 1991 and has approximately $339 billion in investor capital under management. Further information is available at www.breit.com.
This press release includes forward-looking statements within the meaning of the federal securities laws and the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of forward -looking terminology such as “outlook,” “indicator,” “believes,” “expects,” “potential,” “continues,” “identified,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates”, “confident,” “conviction” or other similar words or the negatives thereof. These may include financial estimates and their underlying assumptions, statements about plans, objectives, intentions, and expectations with respect to positioning, including the impact of macroeconomic trends and market forces, future operations, repurchases, acquisitions, future performance and statements regarding identified but not yet closed acquisitions. Such forward-looking statements are inherently uncertain and there are or may be important factors that could cause actual outcomes or results to differ materially from those indicated in such statements. These factors include but are not limited to those described under the section entitled “Risk Factors” in BREIT’s prospectus and annual report for the most recent fiscal year, and any such updated factors included in BREIT’s periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein (or in BREIT’s public filings). Except as otherwise required by federal securities laws, BREIT undertakes no obligation to publicly update or revise any forward -looking statements, whether as a result of new information, future developments or otherwise.
What is KKR acquiring from BREIT in the recent announcement?
KKR is acquiring a $1.64 billion student housing portfolio consisting of 19 purpose-built properties from BREIT.
How many beds are included in the student housing portfolio KKR is acquiring?
The student housing portfolio being acquired by KKR includes over 10,000 beds across the 19 properties.
Which universities are the student housing properties anchored to in the recent acquisition by KKR?
The student housing properties in the acquisition by KKR are anchored to 14 leading four-year public universities across 10 states.
Who will manage the portfolio of student housing properties after the transaction is closed?
The portfolio of student housing properties will be managed by University Partners, a leading owner and operator of student housing across the U.S., upon closing of the transaction.
